Summary
Arch Capital Group Ltd. (ACGL) reported solid financial results for the year ended December 31, 2018. The company demonstrated strong underwriting income across its insurance, reinsurance, and mortgage segments, contributing to a net income of $713.6 million available to common shareholders. The book value per share increased to $21.52, reflecting disciplined risk selection and management across its diverse operations. The company continues to focus on specialty lines, leveraging its underwriting expertise and strong capital base to navigate a competitive market, while also strategically expanding its mortgage insurance business.
Financial Highlights
33 data pointsBeta
Financial Statements
Beta
| Revenue | $5.45B |
| Interest Expense | $120.48M |
| Net Income | $757.97M |
| EPS (Basic) | $1.76 |
| EPS (Diluted) | $1.73 |
| Shares Outstanding (Basic) | 404.35M |
| Shares Outstanding (Diluted) | 412.91M |
Key Highlights
- 1Generated $5.35 billion in net premiums written for the year ended December 31, 2018, a slight increase from the previous year.
- 2Reported net income available to Arch common shareholders of $713.6 million, indicating robust profitability.
- 3Book value per share grew to $21.52 at year-end 2018, up from $20.30 in 2017, demonstrating a positive trend in shareholder equity.
- 4The insurance segment, while experiencing a slight underwriting loss ($28.9 million), showed improved combined ratio at 101.3% compared to 109.1% in 2017, driven by lower catastrophic event activity.
- 5The reinsurance segment posted strong underwriting income of $69.0 million with a combined ratio of 94.5%, reflecting disciplined underwriting and favorable prior period reserve development.
- 6The mortgage segment delivered robust underwriting income of $857.0 million and a significantly improved combined ratio of 28.9%, showcasing strong performance in this area.
- 7The company maintained a diversified investment portfolio with $19.6 billion in investable assets at year-end 2018, focused on capital preservation and liquidity.
Frequently Asked Questions
Arch Capital demonstrated strong financial performance in 2018, reporting net income available to common shareholders of $713.6 million. The company also saw an increase in book value per share to $21.52, up from $20.30 in the prior year, reflecting effective capital management and underwriting results.
The Insurance segment reported an underwriting loss but improved its combined ratio due to reduced catastrophe losses. The Reinsurance segment showed strong underwriting income and a favorable combined ratio. The Mortgage segment was a standout performer, delivering substantial underwriting income and a significantly improved combined ratio, indicating strong operational execution in this line of business.
Arch Capital's investment strategy emphasizes capital preservation, market liquidity, and diversification of risk. The company managed a substantial investment portfolio of $19.6 billion at year-end 2018, with a focus on high-quality fixed-income securities while also holding strategic investments.
Arch Capital employs a comprehensive Enterprise Risk Management (ERM) framework that covers underwriting, reserving, investment, credit, and operational risks. This framework includes setting risk appetite and exposure limits, continuous monitoring, and regular reporting to the Board and its committees to ensure robust risk oversight.